Q3 2019 Earnings Call
Okay, No that's 29000 earnings conference call.
At this time, all participants' lines are in listen only mode.
They're just because presentation there will be a question answer session.
A question during this session you'll need to press star one on your telephone.
Please be advised to today's conference is being recorded usually require any further two cents Express star zero.
I would now like to head to conference over to your speaker today.
Jonathan Neely, Vice President of Investor Relations. Thank you. Please go ahead Sir.
Good afternoon, and thank you for joining us today as we review after knows this third quarter 2019 performance on our plans for the remainder of the year.
I'm joined today by our CEO , Peter Millar, our President and Chief operating officer roaming around it kind of <unk> CFO . Please go down the slides it'll be presented on this call can be viewed on our website often knows dot com and the investor section.
Before we start I would like to remind you that our discussions during this conference call will include forward looking statement.
Statements that are not historical facts are hereby identified as forward looking statements forward looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those indicated by such statements additional information regarding these factors and forward looking statements in discussed under the cautionary note on forward looking statements section of the earnings release.
The issue today.
Well as under the risk factor section and elsewhere have often knows his most recent Form 10-K and form 10, Qs that are filed with the FCC and available at their website Si Si dot Gov and on our website at <unk> Dot Com you are cautioned not to place undue reliance on forward looking statement.
Forward looking statements. During this conference call speak only as of the original date of this call or any earlier, Dave indicated in such statements and we undertake no obligation to update or revise any of these statements. We will now make prepared remarks, and then we will move to a question and answer session with that I will now turn the call over to Peter Millar Theater.
Thank you Jonathan and good afternoon everybody.
We appreciate you joining us for our third quarter update.
We continue to feel great about overall business and are excited in particular to discuss the continued strong growth in demand for expanse and our plans to sustain that growth.
Starting on slide three.
We'll go into more detail in a moment, but I'd like to start by providing five key highlights to take away from today's presentation. First we continue to deliver strong growth in the number of Ics hands prescriptions with an increase of 27% in the third quarter of 2019 compared to second quarter 2019. Importantly, this growth is not just from new prescriptions.
Both new prescriptions and refills are growing nicely, indicating strong interest in the product for both physicians and patients.
We're particularly pleased with this growth through the third quarter as it is typically a down period for the market.
As we review later, our disproportionate growth is also reflected the fact that the share of international Steward prescriptions written for a chance and our target physician audience also continue to increase had a good rate in third quarter is consistent share growth is encouraging and importantly, we believe our current share is indicative of the substantial upside that remains.
Second in the third quarter, we estimate the average net revenue per per exams prescription was $202 up from $197 in the second quarter for the nine months ended September Thirtyth 2019 that produces an overall average net revenue per prescription of $194.
Given these strong results we've raised the low end of our full year guidance range for average net revenue per prescription, which we now expect to be in the range from 100 995 to $205.
Third.
Our growing volume coupled with an increasing average net revenue per prescription yielded strong net revenue growth today, we reported expansion at revenues of 8.7 million in the third quarter of 2019, an increase of 30% over second quarter.
Year to date expansion at revenues through September .
Through September our 90.3 million.
Third quarter was in line with our expectations as a result, we're tightening our expectations for full year 2019 expanse net revenues. We now expect a range of 30 to 33 million versus our prior expectation of 29 to 34 million for the full year of 2019.
For our cash position is strong and 100 $125 million as of September Thirtyth 2019 in the Farmacon financing we entered into in September is expected to provide incremental cash of $30 million in early 2020 and up to $70 million through 2000 through 2021.
And last in September we signed a license agreement for it on Detrick sale.
Just licensing agreement is important to us because it means the treatment will continue to be available for patients. It also provides incremental cash to support the building up our MTN allergy focused company.
Okay.
Turning to slide five.
Very encouraged by the strong growth in prescription volume, we've continued to observe through the last four quarters.
The number of its hands prescriptions in third quarter of 2019 was nearly 43000 this.
This represents growth of 27% over the second quarter of 2019 and compared to the third quarter of 2019, the number of prescriptions increased by more than a factor of four.
This rate of growth during third quarter is especially encouraging in light of Intranasally steroids market dynamics, which typically produce a decline in the overall market during the third quarter. That's occurred again this year.
As we enter into the fourth quarter 2019, we believe seasonal market trends can be expected to return to greater favorability.
We're pleased to report having delivered approximately 18% month over month growth for October over September a strong start to the final quarter of 2019.
I would like to note that growth in the third quarter was again again driven by increases in both the number of new patients in a number of refills and that the proportion of total prescriptions attributed refills has continued to increase as we begin to see more patients using more months of expanse to treat their chronic condition.
We're also encouraged the growth is being driven in both our 80 legacy sales territories and also our 20 new territories that started in April of this year.
As we look into the fourth quarter. In addition, the more favorable market conditions, we expect to see continued growth in the contribution of our new territories as these territory managers get even more productive.
We also expect to realize continued benefit from the use of the seven day sample we introduced a bit earlier this year.
Turning to slide six.
We believe there was a large market for expanse and therefore believed that a very significant upside remains for the product even with the currently targeted audience that physicians.
One way to evaluate that potential is with the expanse share of internal story prescriptions written within our target is from that physician audience to be clear most of the ins prescriptions written within our target physician audience, our for chronic sinusitis allergic rhinitis and other conditions outside of our current nasal polyps indication Nevertheless share.
As a measure we track because we believe there's potential for air in diagnosis specific prescription data in this category because some physicians are choosing to use the product outside of the nasal polyps indication.
Growth in the share has been rapid and steady by nearly a factor of four in the last four quarters from 0.9% in fourth quarter, 2018% to 3.4% in October 2019.
We believe the dispositions continue to personally observe exceeds treatment in their own patients. There's lots of room for continued strong growth and that the ultimately achievable share is much higher suggesting a great deal the future potential just within our current target audience.
Turning to slide seven.
We have confidence that our current commercial strategy is working as evidenced by the continued significant growth ex hands over the four consecutive quarters since the third quarter of last year.
Most of our focus will therefore be who continue to drive strong execution of strategy, but there are few areas. We're also evaluating to further accelerate this growth.
One of these is direct to consumer communication.
We've taken a disciplined approach the DTC learning first through digital pilot. The started in November 2018 and ended in April 2019.
Our next step we're currently running a multi channel test market pilot in Cleveland Charlotte in Hartford, do we expect to complete soon.
We plan to allow this pilot to complete and then carefully evaluate the impact of the investment before committing to a broader DTC program next year.
If we elect and move forward in 2020, we expect that our program would run only during time series that we believe DTC would be more efficient.
Taking a moment to look deeper into the effectiveness of our ongoing commercial efforts. We are encouraged by the continued progress we see in both our market research and interactions with physicians.
On our second quarter 2018 earnings call. We described how we assessed progress within our target physician audience at that time. Our survey data suggested that our efforts, we're succeeding moving physician perception from high degree of product awareness through an understanding of how the product works to achieving a crucial perception that its hands produces a dip.
Frenchie to drug deposition pattern.
After progression happened exactly as we planned, allowing us to transition our communication emphasis to the key next to add to the next to the next key task in the product messaging ladder, achieving a perception a differentiated clinical outcomes.
We knew that the next step will require sustained promotional focus most or by good clinical research data plus physician experience using the product enroll patients plus increasing awareness and discussion by peers in the specialists community.
We recently completed a follow up market research certainly of target physicians to check our progress I'm pleased to report and according to the physician surveyed the response good results seen in their patients is one of the leading reasons. They now prescribed expense.
We also observed substantially improved physician perception of exam on the majority of critical efficacy domains, which drive prescribing decisions.
Continuing to improve this perception will be the primary focus of our sales team and we will provide them with new analysis and data to support this effort such as the prior nasal sub steroids subgroup analysis. We described in our second quarter 2019 call.
In addition to physicians believe in the product will be effective for patients. We continue to believe it's vital to make sure. They have a positive perception of the accessibility and affordability of the product against this objective, we see continuing continuing improvement in perceptions behind the zero 30, 50 patient assistance program, we introduced in September of last.
Last year.
Lastly, we understand the importance of market access and continue to works to sustain and grow exams coverage, we estimate that our commercial coverage is approximately 75% and we continue to pursue additional contracts to increase both commercial and government coverage and improvements to existing coverage.
In a few moments I will update you in our chronic sinusitis program and provide some closing remarks.
And now I'll turn the call over to our CFO , Keith called and for comments regarding our recent debt financing with Farmacon advisors third quarter results and perspectives regarding full year 2019.
Thank you Peter and thank you everybody for joining today.
Turning to slide nine.
In September we announced a $150 million no purchase agreement with Farmacon.
We did this that further strength of our balance sheet, which had $125 million of cash and cash equivalents as of September Thirtyth 2019.
To be clear the $125 million includes drawing the initial proceeds from farmacon and using those proceeds to retire our previous indebtedness to a theory.
Importantly relative to the ending cash balance for third quarter 2019, the from Con financing provides us the potential subject to certain conditions could draw up to $70 million of incremental cash through 2021.
We expect to draw the first $30 million in early 2020.
The this first draw is triggered by a fourth quarter finance expense net sales threshold that we believe we will exceed.
Also important is that in the structuring of this financing the additional $40 million of cash potentially available in 2020 and 2021 is at our discretion.
Finally, and most importantly, this facility provides the potential to extend their cash runway.
Those us to focus on continuing execution of our current successful commercial strategy.
Turning to slide 10.
As we reported opt in those recognized $8.7 million of expense net revenue in the third quarter and $19.3 million year to date through September 2019.
As noted on prior calls one of the metrics that we track is expanse average net revenue per prescription, which is calculated by dividing net revenue for the quarter by the estimated number of expense prescriptions dispensed during the quarter.
We believe this is a useful metric to evaluate the net revenues generated per prescription. However, we remind you that this metric is subject to variability.
That variability is the result of factors that do not necessarily reflect a change in the prices paid for an individual unit of expense.
Including ordering patterns and inventory levels for our wholesale customers and pharmacies that we sell to directly utilization rates of patient affordability programs. The proportion of patients corn expense through an insurance benefit and other factors.
Based on.
Look sense prescription data purchase from third parties and data from pharmacy partners. Our average net revenue per prescription for the third quarter 2019 was $202.
Which was an increase over the second quarter average of $197.
The increase from the second quarters, primarily due to our need to provide less co pay assistance as more patients out of pocket limits. Following the annual reset of insurance deductibles commonly in January .
Typically once a patient meets their out of pocket threshold for the year insurance benefits pick up more of the cost per script prescription drugs, which in turn reduces the amount of co pay assistance provided by our affordability program.
Overall for the first nine months of 2019 expanse average net revenue per prescription was $194.
Given year to date performance and our expectation of quarter over quarter favorability in the fourth quarter of 2019 due to the out of pocket expense and co pay assistance dynamics I. Just described we are increasing the bottom end of our expected range for full year 2019 expanse average net revenue per prescription.
Moving to slide 11.
As highlighted by Peter and our earnings press release, we're tightening our expected range for full year 2019, expanse net revenue to $30 million to $33 million compared to our prior range of $29 million to $34 million.
As expanses of products still in launch phase during 2019, we waited until the second half of the year before providing full year guidance.
In order to have more information regarding product demand and average net revenue per prescription and we may elect to take a similar approach in the future.
In addition, we now expect full year 2019 expanse.
Average net revenue per prescription will be between 195 to $205.
Finally regarding operating expenses.
We are reporting that for the third quarter of 2019 operating expenses were $30.8 million.
Based on leverage operating expenses through the third quarter.
Strong commitment to continue to be efficient with our cash we're reducing our full year 2018 expectation for total operating expenses defined as sales.
General and administrative plus research and development expenses to be in the range of $126 million to $129 million.
Which approximately $10 million is expected to be stock based compensation.
Total operating expenses, excluding stock based compensation are expected to be in the range from $116 million to $119 million.
Previously our guidance for total operating expense range was $128 million to $133 million.
Thus the midpoint of the new guidance range is $3 million less than the midpoint of the old range.
Ill now turn the call back over to Peter to give a brief pipeline update includes remarks Peter.
Thanks Keith.
Turning to slide 13.
In addition to launch of expanse with the current indication we believe significant significant additional long term value could be created by achieving a first ever indication for the treatment of chronic sinusitis. This new indication manpower promotional access to a significantly expanded target audience today, we announced that we expect topline results from the first of two pivotal CF trial.
Sales in the second half of 2021.
With respect to the second CS trial. In addition to recruiting we're still focused on opening new investigational sites, notably global sites in countries, where lengthy regulatory approvals have been required to permit the research to proceed.
We look forward to providing future updates on the CS program, which we find particularly exciting.
This is because he asked as an indication for which we are aware of no current ft approved drug treatment because it because it is condition with a very high prevalence, which is treated by substantially expanded universe of physicians and because treatment guidelines currently call for off label use of needle steroids.
Turning to slide 15.
In closing what we hope you heard in our prepared remarks is that we're confident that our current commercial strategy can continue to drive strong growth for expanse in both prescriptions and net revenue and our growing yet still modest share penetration is indicative of a large market that offers great potential for tomorrow.
We delivered a third quarter 2019 performance in line with our expectations and as a result, we're tightening our improving our financial guidance for his hands net revenues average net revenue product average net product revenue per prescription and operating expenses.
In addition, we have a strong balance sheet and recently completed the financing with Farmacon that is expected to provide access to additional cash the additional cash will enable us to stay heads down focused on execution of our successful commercial strategy.
And finally, we're successfully completing other important corporate objectives. This includes licensing agreement from detrick sale and the ongoing conduct of our chronic sinusitis clinical program.
I look forward to our future updates. Thank you and I would like to open up the call for QNX.
As a reminder to ask a question you'll need to fed Paul one on your telephone.
A question, Chris It down King please stand by well be compiled acuity roster.
Your first question comes from the line of Gary Nachman of BMO capital markets. Your line is open.
Thanks, Good afternoon guys.
So I just was hoping to get a little bit more color on the refill rates, what those look like it sounds like they've been improving but if you could give us some more color on that that would be great and then in the third quarter you grew significantly above the market with about a 38% Delta and in October you grow above the market by a smaller.
Magnitude so were there some competitive dynamics in October that are noteworthy that might continue in the fourth quarter.
And then I have a follow up after.
Yes, I'll take the first Gary on on refill rates and.
I believe or not it's still a little bit too early to Kevin a disk annual finite number of refill because as you know we offered we introduced our zero 30, 50 program about a year ago.
But it took a few months fruit to really sort of kicking in if you will I can tell you that the refill rate. We're seeing continues to increase month over month and the proportion of refills continues to grow as a result of that so all I can say gary's. It's we're feeling really good about refill and I think indicative.
Have a product that is really working for patients relative to competitive on.
Obviously, the until you Matt was introduced in the July August time June July August timeframe.
And at this point, Gary it's really too early to tell but we don't believe there was significant impact from to tell you map prescribing on expanse based on a lot of the work that we're doing we remain very confident in our ability to grow the business in market and as reported we did produce very strong share.
In October of 3.4%.
So we just continue to feel very good about our strategy in our commercial focus.
Okay.
And then just the so the status of the DTC pilot and a three test markets. So when will you have those results it sounds like it should be relatively soon.
And what will you need to see in order for it to be supportive of broader DTC in 2020 next year just.
Maybe anecdotally, what you've been seeing so far on that.
And then maybe lastly, just the status of a search for a new CCOH if thats in the works and when do you think you might be able to identify someone thanks.
Yes, Gary I know Rami feel free to jump in on any piece of this but relative to DC DTC.
I think we announced we are going to reasonably soon the DTC initiative. If you will will end because it was a 12 week period that we were running the pilot.
However, it's going to be weeks, probably few months Gary to really lead to result, so it will certainly be into early next year and the obvious reason for that is the cycle of generating demand in the prescription market is a cycle you have to get patients aware code with Dr. get an appointment.
Had the doctor right the prescription and it's not like a consumer product will you consider read demand reasonably quickly so.
As I said I think it for sure is going to take us into the early part of next year really read overall results, what we're going to need to see Gary. It's on it. We're obviously tracking awareness of the product, we're tracking physician and both physician and patient within that they were looking to drive prescriptions. So the most important measure.
Sure of whether we're going to proceed with the pilot proceed broadening the pilot, we'll see if we drive new prescriptions in those markets.
In terms, what we've seen so far.
It's too early Gary I will tell you anecdotally were hearing loss of positive things from both physicians and patients in the market, but I'm just can say it's too early we're encouraged is what I will say, but it's just too early.
Regarding the status of our Chief commercial officer on I think you've heard us saying on prior calls first off Tom was that was a terrific contributor and Isa guided we were sorry to see go one of the things we're very fortunate to Tom do was build an exceptional team underneath them. We have five very strong senior leaders who reporting.
Tom those leaders are reporting into Rami now Rami Eni is I think you know has always been pretty involved actually very involved in the business.
But so were honestly sort of making sure we take our time not for not because we're trying to be slow the boot who try to make sure that we really look for a great candidates. We have a great opportunity here at often those are not only with the current focus on expanse, but ambitions, we have to building leading technology company. So.
It's going well exactly as we would have expected on the on that on the on the search for new affirmed placement for Tom.
Okay. Thanks, a lot.
Your next question comes from the line of David Steinberg of Jefferies. Your line is open.
Yes, thanks very much.
Two questions first.
Mentioned, Keith that you're taking down your.
Guidance range for spend by 3 million and I also noticed that your other expense line kind of ballooned up from averaging about 1.7 million. So looks like 9 million. This quarter. So first on the lower expenses is that.
Is that simply shifting of R&D to next year or less promotion and then.
With a bigger increase and then.
Other expense line is that just like a reallocation of expenses or something else and then my second question is can you update us an off label use use particularly in allergic rhinitis I think you said last call that less than 25%.
From off label use and then finally, just for a housekeeping questions.
What percentage of total scripts that we see an acute.
Our mail order in what what are what our retail at this point I think last quarter was 85% to 9%. Thanks.
David This is Keith I'll handle.
I'll handle maybe the first in the second first and last and then turn it over to Peter.
To talk about the you're off label use question. So with first with respect to the expenses that showed up in other expense those were primarily expenses related to the retirement of the of the theory of debt.
There is interest prepayment penalties payable as well as.
An amount of make whole interest that we paid so as we were recorded in other expense.
With respect to your question as it related to kind of the where the overall decreases coming from I will say it is a mix. Some we as is often the case you have some expenses that.
Some of the some of our.
Departmental had thought they could but thought they would expand this year that are going to be moving into next year, but a lot of it is just as a as I mentioned in my prepared remarks.
We are we are.
Always focused on being prudent with our cash so I think some of it is just a careful spending.
Jumping to your last question with respect to the proportion of scripts.
Trx is that are captured by Acuvue. The range is consistent with what we reported prior quarter. We believe Cuba is capturing between 85 and 90% of the Trx is that our dispensed in the period.
And David just clarify was your question what Keith just to answer is that proportion thats truly in retail versus in.
Mail order.
No I think I think he's got to the question is just what we see the weekly I Q via data, we just wanted to get a sense of.
What percent is at a total prescriptions, which I think he answered yet terrific.
Relative to use of the product by docs.
Not much has changed today, we'll continue to see the majority of the prescriptions written in the chronic rhinosinusitis on area that reasonably split half and half between nasal polyps and non nasal polyps for as chronic sinusitis patients and less than 25% allergic rhinitis.
Great. Thanks very much.
Your next question comes from the line of David Amsellem of Piper Jaffray. Your line is open.
Thanks, So just wanted to get an updated on the payer landscape and.
If anything has changed meaningfully in terms of prior offs and step edits.
In terms of how well onerous if.
Step edits our onerous can you talk to that I guess qualitatively.
And also what portion of commercial covered lives have what you would call hassle free access I know you've talked about that metric before so that's number one and number two is if you can fair to opine on.
Net revenue per Rx and 2020 or at least give us some color directionally on where that may have that'd be helpful. Thanks.
Yes, I'll take the first thing Keith I'll pass the second to you.
In terms of payer meaningful changes.
We continue to feel very good about the coverage David is as Weve said historically that we're hovering between 75% to 80% in terms of coverage, we had a real focus across the back half of this year on government contracts and I will remind you by the way that the huge majority of prescription in this category are coming.
Commercial.
But nonetheless, there is business and government and we certainly want to make sure those patients get potential access to the medication.
And I can tell you that we're making real progress to signing contracts on the government side as I'm sure you know it takes a while for that to work through formulary coverage. So I think you'll start to see that.
From Twoq to Threeq, you really potentially showing up on the government side on in terms of your question on hassle free versus requiring some additional work, it's really pretty consistent David in terms of over the last three or four quarters, no real change, meaning that all of the 75% roughly said.
35% commercial coverage that we report.
It's about 10% to 15% in some form of the additional work by a doctor or an office some and as I think you know we focused on prior authorizations that are reasonably simple, they're not onerous for the most part and that would put about 60% or so and what we defined as the hassle free.
Historically and reasonably unchanged.
And David helpful.
David with respect to your question on on.
Total average net revenue per Trx, we're not giving guidance at this point on 2020 expectations. Although I will comment that we would expect a similar trend next year as we as we saw this year and.
Really last year as well.
And that is.
In the first quarter.
Assuming that we would keep our current co pay assistance program. Our current affordability program in place, we're recovering out of pocket costs.
Because of the deductible resets that typically occur in many plans in January .
We had the same plan in place than we would expect to see lower average net revenue per trx in one Q.
And then gradual growth through the year as more and more patients meet their out of pocket thresholds, whether it be in a high deductible plans are not enough that it's in a high deductible plans and meet the threshold or some patients just haven't out of pocket Max.
In a typical HFO plan so.
As those patients hit their out of pocket threshold maximum thresholds.
I would assume our proportion of or the insurers proportion of coverage would go up and therefore, we'd have to contribute less through a patient affordability program, resulting in a higher average net revenue per trx.
Hey, thanks.
Hi.
Your next question comes from the line Randall Stanicky of RBC capital markets. Your line is open.
Great. Thanks, I just have a couple with Peter with the new sales initiatives most of them started back in the second quarter I mean, whether it be the addition of 20 reps to Q.
The seven day sample began I believe in May and then the pilot Dtcs and even some of the contract wins you've called out.
By order of magnitude.
Those is having the biggest positive impact so far with.
I guess six four to six months or so behind you here are any of these initiatives having an outsized.
Positive impact relative to the others. So that's question number one.
And question number two you guys have a sense at this point, how many scripts. The average patient is using per year or trending to per year. I guess, what are you seeing there and that's the second question then I have one more follow.
Yes, when the first one Randall thanks for the question on the easiest wanted to answer is the impact on DTC and the reason I see that the easiest is that that's a test and a pilot so the impact broadly on prescriptions is going to be not substantial even if we're very successful in the three test markets.
So that will not for sure have national impact on.
Even as I said, even if we have significant impact in those markets are just not substantial enough.
Relative to where we're seeing contribution from the territory managers versus a seven day sample I'm going to answer that is yes.
It's sort of hard to tease that apart Randall I will tell you we feel terrific about the contribution that we're seeing from the 20, new territory managers that we added in April of last year Rossy tracking that group.
And encouragingly, we're seeing nice growth in our legacy territories, we feel great about that group as well and we're seeing really good just beginning to accelerate honestly growth on the part of the new territory manager. So we'll see but we're hoping for continued good acceleration in car.
Attribution from the territory managers on the seven day sample the analysis that we've done suggest that.
Thats going to have impact as well as you can imagine, it's just hard to tease them apart.
But I will tell you as a result of the seven day sample and our view that it won't have the same cannibalization is the 30 day sample did on we're we're distributing significantly more samples with a seven day than we were with the 30 day and we are seeing and offices, where we start to increase samples nice growth.
So that probably wasn't the specificity that you wanted but I will tell you we're feeling good about both levers that we're pulling their.
Did you guys did you disclose did you guys disclose what percent of patients who get a sample move on to prescription patients.
We've not.
I'm not sure we even can track it honestly at that level.
It's a tough thing to track at the patient level.
But we don't Weve not disclosed it.
Okay relative I will tell you, though Randall we have good data that says the seven day sample is isn't isn't effective way to drive the business.
Relative to Rx is per year, we've historically talked about for prescriptions per year.
Im sorry, Q3 in the ppm in the ppm network.
And we don't have to any data at this point in time to believe that that is in a good number we believe that looks to be a good number.
Okay and then that's helpful. And then my last question, it's more Big picture just one of the glaring seems to market is this notion that there's.
One of cost infrastructure, selling a relatively small number of products setting up a pretty big opportunity for therapeutic consolidation.
Within the sector you know I've talked about this before where are you guys. On this I mean is executing on business development to give your rep base. Another product is that something that is high on the list of.
Yes things you're focused on for 2020 is a nice to have or is it more of the backburner as you guys try to drive PX since launch.
Ill start rental with title, we start which is the full the top five focus is immediately for the company are driving enhanced business and we believe it's critical to have what business that really has strong trajectory to build on and so that's the primary focus of the company I know.
You're not surprise to you that.
Relative to putting additional products into the infrastructure, it's absolutely something we're working on.
I think you saw that we announced Michael Richardson.
We hired Mike August of this year, Michael Spin a terrific edition of the team. It's an area that we're beginning to create real focus against.
In the near term the focus is its hands, but.
As we've talked about historically, we absolutely have ambition to build a leading into the analogy specialty company and you can't do that with one product so.
It's absolutely going to be something we're focusing on I don't want to tar Theyre out.
Hi, medium low Randall I'll, just say that at some certainly in the next 12 to 18 months, it's something that we are going to focus on trying to make happen.
And our their assets out there.
Absolutely.
Absolutely.
Okay, great. Thanks, guys.
Your next question comes from the line Abedin thoughts with Cantor Fitzgerald. Your line is open.
Hey, this is Brian on for Brandon apologies, if you've asked this already have just hopping through calls my first question is while it is still early do you have an insight into the persistency for expense.
Do you still believe for prescriptions, a year that number to think about per patient.
Does differ at all between nasal polyps and chronic sinusitis patients. Thanks.
Yes, we're off to participate I just did answer that Brian no worries that he asked that again, but as I. It was we saw as I said, we had expected about four prescriptions per year, we're still tracking it in the ppm channel in the preferred pharmacy network and we still think Thats a reasonably good number.
Relative to differences in nasal polyps NCS, we don't frankly, havent cut that fine.
But I will say as I've said, historically I'm feeling really good about the growth in both refills and new prescriptions. It at this point the launching over 15 16 months into the launch of the product, we're still seeing really nice growth on new prescriptions and we're seeing real nice contribution as you would expect on refills.
I mean, there's potential we have continued real upside in this business in our view.
Great and then could you just help us through the market dynamics of biologics and some of the product in development for chronic sinusitis third come to market. How do you see extends fitting into that treatment paradigm. Thanks.
Yes, I'll start it may be in Rami I'll turn it over to you.
Number one is that the biologics, we're studying pretty severe population so and so in terms of where we think that fits from our view, which is likely certainly where patients were doctors are going to begin and argue is probably in a more severe population the probably the most important point about the biologics is.
How those products were studied in clinical trials and how they are being used in the market on its combination therapy with in internal steroids spray. So patients are started on entry nasal spray if a patient does it get adequate treatment. The recommendation is to go to a biologic.
And for that reason, we just don't view the biologics is necessarily competitive because we think.
Now that we think we are the most.
A very effective.
From an option patient that physicians should try before going more biologic.
So for that reason as I said, we don't really see it is competitive running up move you have anything to add or just remind due to these unlike some products are not mutually exclusive they can be used together the indication that has been granted for dupilumab.
Is narrower than our indication in two ways narrower in the sense that it's only for refractory patients and its narrower in the sense that Peter alluded to to add on therapy only.
So we view that as potentially complimentary from a clinical perspective, and then from a sort of market access and sort of marketplace perspective. The price difference is some sort of a major factor that we think plays in our favor as we continue to have conversations with different payers.
Good thanks.
There are no further questions at this time I would now like to turn the call back over to theater. Please go ahead Sir.
Well, we actually thanks, everybody for joining us we look forward to our next call.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.